Nothing going on but the rent

Helen Porteous and her family like to spend their holidays in Megève, a small, very French ski resort in the Alps. They spend several weeks there every winter, renting a chalet through Stanford Skiing or, occasionally, staying in one of the local hotels. "We did look at buying a couple of years ago," Porteous admits, "but we didn't think it was sensible. We continue to rent because we can be more flexible. We don't have to worry about taking care of a place if we don't own it - we have enough trouble with the upkeep of our house in England." The pistes in Megève are always well-groomed, the family know their way around so they can spend more time skiing, and they have a ready-made social life with friends they've met on past visits.

Another regular visitor to Megève, Barry Butler, echoes the views of Helen Porteous. He has been to the resort six times, and stayed in the same chalet on four of his visits. He, too, is clear about the benefits of renting. "You can close the door when you've finished your holiday, and you don't have to worry about the property. And you aren't tied to the same place all the time. But having said that, when we go back to Megève the place feels just like it did when we last left it - it's like home." Butler owns a house in Saint-Tropez, "but a few bad experiences with friends who have borrowed it have taken the shine off it," he admits.

Sarah Green, director of Serendipity Rentals, formerly La Perla Rentals, believes that there was a time when many people thought that they could buy a cheap property in France, spend very little on doing it up, and then rent it out, turning a large profit. "That is definitely not so now," she observes, "and people are not prepared to take the risk any more. Buying a house is hard work, and you need to bring in enough money to make it work."

Serendipity Rentals started up in 1989, when Sarah Green bought and renovated six properties to a higher-than-normal standard and marketed them to prospective clients as a home away from home. Tenants started booking her properties on a regular basis and the business began to expand, although the expectations of her holidaymakers have continued to rise. "There is now a regular demand for heated pools, central heating, TV and videos," she says. She receives a substantial number of repeat bookings, although many people prefer to try different properties or destinations on each visit. The properties in her portfolio are in the Dordogne, as well as nearby Lot and Gironde, and this year she has three new properties in Haute-Provence. Emphasis is on comfort, and accommodation is in chateaux, farmhouses and gîtes, which sleep between four and 22 people.

Joanna Yellowlees-Bound, managing director of Erna Low, a long-established company offering a variety of hotel and self-catering accommodation, agrees with Sarah Green that what people want to rent is a large, luxury property. Until recently these were hard to find, particularly in the Alpine resorts in which Erna Low specialises. Now though, Erna Low has teamed up with Intrawest, a large Canadian property development company which is building a completely new Alpine resort, Arc 1950, part of the extensive Les Arcs-La Plagne ski complex in the Tarentaise valley.

The development will provide luxury two- and three-bedroom apartments and three-bedroom duplexes, and all the properties have already been sold, even though Arc 1950 is not yet fully open. Owners can reserve their property for their own use for a period of two, four or seven weeks, and must lease the remaining weeks back into a pool. The apartments, and the hotel-style facilities that come with them, are then rented out by operators such as Erna Low, who pass on an income to the owner. Yellowlees-Bound is delighted to be involved in the development. "The quality of accommodation available has never been this good before," she says. "Arc 1950 really sums up the need for properties of this standard."

While this is the very top end of the rental market, the demand for a greater level of home comforts is now an important factor in many rental programmes. Recognising that clients want a standard that is at least comparable with what they have at home is part of the reason for the success of Owners in France, one of the holiday programmes run by Brittany Ferries. According to general manager Christiane Barker, "with Owners in France, all the properties are British-owned. This means that they are equipped with a kettle and teapot, satellite TV so that you can watch programmes from home, and English videos and CDs. It's a good way to get acclimatised to being in France." With this programme, Brittany Ferries acts as an agency, enabling owners to advertise their properties direct to potential tenants.

In addition to Owners in France, Brittany Ferries runs a gîte and holiday cottage business, combining self-catering accommodation with ferry crossings. Both programmes have a high rate of repeat bookings: up to 35 per cent in the case of the gîte business. "We know from our visitors' books that people keep coming back to France," says Barker. "We have some guests who have been coming for 20 years, and now they feel like part of the community."

Most rental operators have anecdotes of clients who started renting and liked the place so much that they decided to buy. But according to Barker, the number of people choosing to do this is declining. "We hold exhibitions every year to recruit property owners for our Owners in France programme, and in the last couple of years the numbers have been decreasing, possibly as a result of the weak pound." This isn't causing her too many worries, though. Whatever she loses on English-owned properties, she expects to win back for the gîte business.

Stanford Skiing: 01223 477644, www.stanfordskiing.co.uk; Serendipity Rentals (formerly La Perla Living Rentals): 02920 443844, www.serendipityrentals.com; Erna Low: 0870 750 6820, www.ernalow.co.uk; Brittany Ferries: 08703 665333, www.brittany-ferries.com

SHARE ISSUES THE PROS AND CONS OF TIMESHARE

Although for many years timeshare has had a bad name, tighter regulations introduced by the European Union have meant that it is now worth considering as a way of financing a holiday without the responsibility of actually owning the property.

Timeshare is self-catering accommodation, which is usually of a high standard, often much higher than other rental property, and is often in a resort with extensive leisure facilities. The way it works is that a timeshare developer, a company such as Disney, Accor or Pierre et Vacances sells a product. This is usually a fixed week's holiday in a fixed resort, although it can sometimes be a floating week, bookable at certain times of year. There is a one-off fee, which gives the timeshare owner the right to use the accommodation at the agreed time each year; in addition there is an annual maintenance payment.

Accommodation can also be swapped for something in a different resort. This is done through an organisation such as Interval International, which has agreements with a number of developers to handle exchanges; these include the Marriott Vacation Club, which has a property just outside the Disneyland Resort in Paris. Buying into a timeshare should be regarded as an investment in holidays, rather than an investment in real estate. The exception to this is in the most expensive locations, where timeshare is usually used as an alternative to buying outright, an opportunity to have a second home without the cost or responsibility of maintaining it.

It always pays to be careful. Genuine timeshare salesmen are not allowed to demand a deposit on the day a decision is made to purchase, and there should always be a cooling-off period so that the prospective buyer does not feel forced into making a purchase. The Office of Fair Trading publishes advice on buying timeshares (www.oft.gov.uk), and organisations which offer advice include the Organisation for Timeshare in Europe (fax 0032 2 533 30 61, www.ote-info.com).